Nationwide Interest Rates - The Timing Seems More Than A Co-incidence...

ACG

Best of luck with your complaint (anything that goes in the customers favour I am all for), but I cant see you getting anything for this. 

KevinUTO1867

ACG said:

Best of luck with your complaint (anything that goes in the customers favour I am all for), but I cant see you getting anything for this. 

Thank you - I'll post the outcome here.

How this episode plays out determines if I keep my mortgages, savings & investments, and banking with Nationwide after being a customer for around 25 years. So if I'm not happy with the outcome, I'll be content with moving it all elsewhere. Customer service and honesty means more to me than a few quid, so either way I'll feel I've "won" as I try not to entertain companies who can't maintain certain values. 

Hoenir

KevinUTO1867 said:

Co-incidentally, yesterday's announcement came the next working day after Nationwide's cut-off point for exiting products or switches signed up to that month.

How can they determine one without knowing the other. Mortgage books are run at the macro level. All will be determined by data. Along with the tranche of funding made available to every new product. 

You won't receive a satisfactory response to your complaint. As this is a pure commercial decision. Given the scale of the operation. If you take your business elsewhere then it's not going to concern the Nationwide. 

If rates had risen. Would you be complaining now ? 

ACG

You are assuming they have done something wrong. Im not saying they have or have not, I have no allegiances towards them.

But having an idea of what goes into developing a product (my mate is a product manager for a bank), its not one of those things where someone says they are doing it for 4% so we need to do it for 3.99% and out it comes. There is research, calculations, getting it signed off by whoever needs to do it.

I was speaking to someone quite high up at a building society - now admittedly theirs is a 100% manual process and requires about 3 meetings - from them being told to design a product and getting it launched, its a 4 week process. Which is quite interesting when you think how rates have moved in the last 12 months. When rates were going up, they were bringing a product to market and it was about .75% lower than the high street. They had to pull the products after about 4-5 days because they could not handle the amount they were getting. 

Now rates are coming down and their rates are about 1% above where they should be. 

On a side note, when I worked in complaints for the bank the customer having x, y and z with us made no difference to the response. Funnily enough it cant due to regulation - everyone needs to be treated equally. So if they give you money its because they think it is the right thing to do. Not because you bank with them and are threatening to leave. 

KevinUTO1867

Hoenir said:

KevinUTO1867 said:

Co-incidentally, yesterday's announcement came the next working day after Nationwide's cut-off point for exiting products or switches signed up to that month.

How can they determine one without knowing the other. Mortgage books are run at the macro level. All will be determined by data. Along with the tranche of funding made available to every new product. 

You won't receive a satisfactory response to your complaint. As this is a pure commercial decision. Given the scale of the operation. If you take your business elsewhere then it's not going to concern the Nationwide. 

If rates had risen. Would you be complaining now ? 

Mortgage rates are also determined by when it's most profitable for the lender, and I suspect its more profitable to announce cuts when a higher percentage of borrowers can't move their business elsewhere/to lower rates. Which is fine, but it's a pretty unethical and very opportunistic. Not the sort of organisation I'm interested in using.

Well, that's why lenders have complaints procedures and regulators to adhere too. That's why I'm happy to go through the process and let those with more knowledge than you or I determine the case.

I'm sure Nationwide won't be bothered about losing my business, and I'll remember that the next time they offer me money to open an account with them. They don't want £100,000's in business from me, but they'll happily pay me £100 to open a current account with them. 

I'm not the one who determine the rates, so if Nationwide was silly enough to increase rates after their own cancellation cut off, then that's on them. But, they're not that silly! 

Anyway, thanks for your input. But I'm really looking more for advice and/or anyone else affected, rather than opinions of the outcome on my case and clogging up the thread.

ACG

KevinUTO1867 said:

Mortgage rates are also determined by when it's most profitable for the lender, and I suspect its more profitable to announce cuts when a higher percentage of borrowers can't move their business elsewhere/to lower rates. Which is fine, but it's a pretty unethical and very opportunistic. Not the sort of organisation I'm interested in using.

Well, that's why lenders have complaints procedures and regulators to adhere too. That's why I'm happy to go through the process and let those with more knowledge than you or I determine the case.

I'm sure Nationwide won't be bothered about losing my business, and I'll remember that the next time they offer me money to open an account with them. They don't want £100,000's in business from me, but they'll happily pay me £100 to open a current account with them. 

You say that, but the flip side is that if they do not offer competitive deals they will lose the customers who have free choice and be stuck with the ones who are maybe a higher risk - thats not a good risk profile to hold for a vanilla lender. 

Playing devils advocate here, your argument is that you do not want to deal with a bank who treats their customers like that (commendable) but will do if they give you money... 

I think you need to get a bigger mattress and stuff your money under.

KevinUTO1867

ACG said:

You are assuming they have done something wrong. Im not saying they have or have not, I have no allegiances towards them.

But having an idea of what goes into developing a product (my mate is a product manager for a bank), its not one of those things where someone says they are doing it for 4% so we need to do it for 3.99% and out it comes. There is research, calculations, getting it signed off by whoever needs to do it.

I was speaking to someone quite high up at a building society - now admittedly theirs is a 100% manual process and requires about 3 meetings - from them being told to design a product and getting it launched, its a 4 week process. Which is quite interesting when you think how rates have moved in the last 12 months. When rates were going up, they were bringing a product to market and it was about .75% lower than the high street. They had to pull the products after about 4-5 days because they could not handle the amount they were getting. 

Now rates are coming down and their rates are about 1% above where they should be. 

On a side note, when I worked in complaints for the bank the customer having x, y and z with us made no difference to the response. Funnily enough it cant due to regulation - everyone needs to be treated equally. So if they give you money its because they think it is the right thing to do. Not because you bank with them and are threatening to leave. 

Nationwide have managed two rate changes in 8 days at the back end of 2023, so it's possible they have a different process to the person you've spoken to? I guess they may have staff working on many different models/scenarios way down the line, so they can act as the market changes.

I'm calling announcing a rate change 8 hour after their cancellation window has closed as unethical and bad form - whether it's deliberate or not. As a result, I'm happy to invest time going through the relevant complaints processes to determine an outcome.

I'd rather Nationwide review their rate changes vs their cancellation window and change it accordingly, rather than receive any money. I'm fortunate that it doesn't impact us financially, but others won't be as lucky and could end up with serious financial consequences as a result.

Anyway, I'll be happy to update the thread with the outcome. Hopefully, it's a positive one and will help others too.

ACG

KevinUTO1867 said:

ACG sai

Nationwide have managed two rate changes in 8 days at the back end of 2023, so it's possible they have a different process to the person you've spoken to? I guess they may have staff working on many different models/scenarios way down the line, so they can act as the market changes.

This is a fair point. It could be different products though - different product managers reacting at different times to market conditions. I dont know in all honesty, I suppose I am just trying to give another side to the argument. Its quite easy to make assumptions not knowing the details (which neither of us do I am guessing), but I do have some indication on how it works albeit limited. 

Nationwide are much bigger than the building society I was talking to. The one I spoke to does about £150 million a year, I bet nationwide do that in a month. Their processes will be completely different I imagine. 

KevinUTO1867

ACG said:

KevinUTO1867 said:

Mortgage rates are also determined by when it's most profitable for the lender, and I suspect its more profitable to announce cuts when a higher percentage of borrowers can't move their business elsewhere/to lower rates. Which is fine, but it's a pretty unethical and very opportunistic. Not the sort of organisation I'm interested in using.

Well, that's why lenders have complaints procedures and regulators to adhere too. That's why I'm happy to go through the process and let those with more knowledge than you or I determine the case.

I'm sure Nationwide won't be bothered about losing my business, and I'll remember that the next time they offer me money to open an account with them. They don't want £100,000's in business from me, but they'll happily pay me £100 to open a current account with them. 

You say that, but the flip side is that if they do not offer competitive deals they will lose the customers who have free choice and be stuck with the ones who are maybe a higher risk - thats not a good risk profile to hold for a vanilla lender. 

Playing devils advocate here, your argument is that you do not want to deal with a bank who treats their customers like that (commendable) but will do if they give you money... 

I think you need to get a bigger mattress and stuff your money under.

Agreed, but there also has to be a timing that allows those with agreements in place some time to exit if they wish to. My agreement hasn't even started yet and I'll be paying more when it starts than I would otherwise - and that's all down to Nationwide choosing to change their rates during their non-cancellation period. If they couldn't change their rates at any other time (unlikely), then give flexibility on the cancellation period.

Not quite. I'll give Nationwide my money if they operate in a fair and honest manner - which includes looking at complaints and acting appropriately; as I fully understand this issue may have been unintentional. I won't if they don't - unless I'm locked in and have no choice! I've always found building societies to operate and demonstrate better values than banks, hence I tend to use them where I can. That's from experience, not a generalisation that all banks are bad, btw.

KevinUTO1867

KatrinaS22 said:

I am in this exact position, awful practice and a terrible way to treat their customers. I'd be very interested to hear their reply to you and also looking for advice on next steps. 

Hi, to keep you updated - Nationwide were very quick to reply to my complaint.

Nationwide are standing by their decision, claiming rates do change "close" to the non-cancellation period (not acknowledging that his change is during the period) and that the market is changing quickly right now and they need to make quick decisions as a result.

They ask if I accept this outcome. I've replied to say that we don't accept it and are now waiting for the next step in the complaints process (which I think is straight to the Financial Ombudsman, but I want to ensure we go through all Nationwide's complaints process first).

So, if you do intend on challenging this, you might want to do so sooner rather than later as it looks like it's going to be a long process! And, perhaps the more who complain, the better chance of Nationwide's stance being overturned - who knows!